Toby Smith

Worst Consumer Spending Outlook on Record

by Toby Smith   12/22/08

The Hunkered-Down Consumer

Saving more money (up six points to 39%) and reducing debt (up two points to 33%) are still the dominant reasons given by consumers for why they're spending less.

Reduced income (up four points to 37%) also remains a top reason -- up for the third consecutive survey and a clear sign that the recession continues to take an enormous toll on the consumers' spending power.

Retail Store Trends

For the seventh consecutive ChangeWave survey, Wal-Mart (WMT) and Costco (COST) remain the retail leaders going forward.

However, Wal-Mart shows the most momentum, gaining one point for the second consecutive survey. Costco, on the other hand, has fallen two points since November.

Once again, the greatest weakness going forward is among the traditional retailers -- led by Sears (SHLD), Bed, Bath & Beyond (BBBY), Macy's (M), JC Penney (JCP) and Linens 'n Things.

Looking ahead, Target (TGT) (net score = -7) also shows significant weakness for the next 90 days.